Energy crisis drives costly LNG imports
Bangladesh is turning to increasingly costly liquefied natural gas (LNG) imports to ease its worsening energy crisis, with the government approving a cargo at nearly three times the pre-conflict price while drawing up plans to expand import capacity, drill hundreds of gas wells and add more floating terminals.
The Cabinet Committee on Government Purchase on Monday approved one LNG cargo from Singapore-based Vitol Asia Pte Ltd at $29.795 per million British thermal units (MMBtu) for delivery on 27-28 October.
Before the US and Israeli attacks on Iran and the subsequent escalation of the Middle East conflict, LNG was available at around $10 per MMBtu.
The committee, chaired by Finance Minister Amir Khosru Mahmud Chowdhury, also approved an LNG cargo from UK-based TotalEnergies Gas & Power Ltd at $28.95 per MMBtu, to be delivered on 9-10 October. The cargo will be procured through an international quotation process.
It approved direct purchases of two cargoes from US-based DARAB Inc at $17 per MMBtu and two from US-based Mind Mingle LLC at $19 per MMBtu.
The purchases come as the government seeks to address persistent gas shortages affecting industries and other consumers while reducing the risks posed by disruptions to Bangladesh’s limited LNG infrastructure.
Third FSRU before 2028
The government plans to bring a third floating storage and regasification unit (FSRU) into operation before the beginning of 2028 as part of a broader effort to increase gas supply, Prime Minister’s Adviser and PMO Spokesperson Mahdi Amin said on Monday.
He disclosed the plan while briefing journalists after a meeting between Prime Minister Tarique Rahman and leaders of major business organisations.
At present, Bangladesh depends on two FSRUs, one of which had remained out of operation for an extended period.
The government is working to repair the facility while also expanding the number of terminals, Mahdi said.
“We are not only setting up FSRUs; the government is also taking multiple initiatives to establish land-based LNG terminals and develop gas pipeline networks,” he said.
The immediate target is to raise the number of FSRUs to three, followed eventually by the addition of two more to bring the total to five, according to the adviser.
The government has also decided to import 18 LNG cargoes from TotalEnergies over nine months, with two cargoes scheduled each month from October this year to June next year.
Additional cargoes may be purchased if required, subject to agreement between the two sides.
The TotalEnergies LNG will be procured through direct international procurement at Japan Korea Marker (JKM) plus $0.06 per MMBtu, slightly below the rate agreed with US-based Gunvor for 14 cargoes to be imported between 2026 and 2028, at JKM plus $0.0875 per MMBtu.
More gas wells, terminals
Alongside LNG imports, the government is pursuing a medium-term plan to increase domestic gas production.
Around 150 gas wells are currently being drilled, Mahdi said. After completing the programme, the government plans to undertake another round of drilling involving around 150 additional wells.
The government is also planning to add 1,600 million cubic feet per day (mmcfd) of LNG supply capacity by 2030 to meet rising demand.
Under the plan, a 600 mmcfd floating LNG terminal will be established in Maheshkhali by 2028, while a 1,000 mmcfd land-based terminal will be commissioned in Matarbari by 2030.
State Minister for Power, Energy and Mineral Resources Aninda Islam Amit announced the capacity expansion plans at the 15th LNG Producer-Consumer Conference 2026 in Tokyo.
The government is also examining the feasibility of urgently setting up another floating LNG terminal near Payra or Mongla ports, or at another suitable location along the southwestern coast, Prime Minister Tarique Rahman told Parliament on 9 September.
The proposed facility is intended to expand LNG import capacity and help shield industries from sudden or temporary supply disruptions.
A floating LNG terminal at Kutubjom in Maheshkhali is expected to begin supplying regasified LNG in 2028, while the land-based Matarbari terminal is scheduled to start supplying gas by December 2030.
Power diversification
The government is pursuing similar expansion and diversification plans for the power sector, Mahdi said.
State Minister Amit presented the government’s two-, five- and 10-year plans covering power, gas, energy and mineral resources at Monday’s meeting with business leaders.
The power roadmap includes a generation mix based on oil, gas and coal aimed at ensuring electricity self-sufficiency, alongside a strong emphasis on solar power.
“In the coming days, we want to diversify our power sector and become self-sufficient in energy resources while giving the highest priority to solar energy,” Mahdi quoted the state minister as saying.
The government’s plans come amid mounting concern among businesses over unreliable energy supplies and their impact on industrial production, investment and economic activity.
Mahdi said the government recognised that many of the problems had accumulated over time and could not be resolved immediately.
“It may not be possible to fully resolve them in a day, a month or a year.
However, the government has the highest level of commitment and sincerity, and the Prime Minister has specific plans,” he said.
Business seeks solutions
The meeting brought together leaders of 21 business associations and apex
bodies, who shared their concerns about power, gas and other economic issues.
Mahdi said the government wanted the public sector to provide policy support while the private sector implemented those policies in partnership with the government.
“Our business leaders, whose taxes, labour and capital underpin industrialisation and economic progress in the country, are particularly important,” he said.
“Together, the public sector, private sector, government and business community will work shoulder to shoulder to take the country forward.”
He said business leaders had raised a number of problems, but the government viewed each challenge as a potential opportunity for improvement.
The government would continue consultations with business organisations and apex bodies to strengthen cooperation and address their concerns, he added.
“These consultation meetings will continue to be held regularly in the coming days,” Mahdi said.
